FILE PHOTO: People walk by an Under Armour store in Manhattan, New York City, U.S., February 7, 2022. REUTERS/Andrew Kelly/File photo

By Neil J Kanatt

(Reuters) -Under Armour said on Friday its sales decline would worsen this quarter and warned of soft demand as well as $100 million more in tariff-related costs for the year, sending the sportswear maker's shares down about 20%.

The company has struggled to drive up demand in the past two years and efforts to revive the business have hit more roadblocks in recent months due to the Trump administration's shifting tariff policies.

Maryland-based Under Armour had brought back founder Kevin Plank as CEO in March last year to reboot the business.

"It's concerning that, going a year into its restructuring plan, there's still little sign of a reversal in its revenue declines and profitability struggles on the horizon," said Emarketer analyst Sky Canaves.

CEO Plank said Under Armour was also considering bumping up prices for the "embedded consumer who we do have pricing power with".

It expects quarterly gross margin to decline by 340 to 360 basis points due to potential tariff-related supply chain snags, but said favorable foreign exchange and pricing benefits would partially offset the decline.

As of May, the company was sourcing about 30% of its overall merchandise volume from Vietnam and 15% from Indonesia. It faces a direct risk from President Donald Trump's 20% tariffs on goods from Vietnam and 19% on Indonesian goods, though it remains unclear if the levies are final.

"Given the new tariff cost this year and related demand impacts ... we expect operating income on an adjusted basis to be roughly half of fiscal 2025 levels," said CFO Dave Bergman in a conference call.

The company also forecast a decline of between 6% and 7% in current-quarter revenue, compared with analysts' average estimate of a 2.9% drop, according to data compiled by LSEG.

For the first quarter ended June 30, revenue fell 4% to $1.13 billion, in line with estimates, while adjusted profit per share of 2 cents missed estimates of 3 cents.

(Reporting by Neil J Kanatt in Bengaluru; Editing by Devika Syamnath)